Verizon/AOL - 5 Reasons Justifying the $4.4B Mega-Deal

Verizon -- You've Got Mail! Massive breaking media news today -- Verizon has agreed to buy AOL for $4.4 billion cash.

Remember back in 2000 when AOL bought Time Warner for $162 billion?

My how fortunes have changed over the course of those 15 years. AOL, the previous behemoth, lost its way along the way and held on too long to its dial-up bread and butter -- and ultimately failed to capitalize on its massive distribution on the content side.

Verizon hopes to change that. And, it might just be able to do that.

Here Are 5 Reasons Why:

(1) With AOL, Verizon becomes almost Comcast/NBCUniversal-like -- vertically-integrated, with a massive distribution platform to pipe heaps of content;

(2) Even more, Verizon's mobile distribution platform is the one that matters most in these transformed media times. Mobile is no longer the "second screen" -- it is absolutely the first screen (absolutely) with the millennials who matter most to marketers.  And, don't forget, Verizon plans to roll-out its mobile-focused OTT video service soon, very soon -- so it needs to feed "the beast" with compelling content.  Make no mistake, mobile is absolutely driving this deal; 

(3) Speaking of marketers, AOL is still a powerful force. Its sales force is proven -- and, in Verizon, it now has a massive new advertising platform to sell (and, again, for the young eyeballs that matter most).  Let's also not forget that AOL has invested significantly in ad-tech over the years, including Vidible and Adap.tv;

(4) Verizon needed to do something significant to counter AT&T's increasingly bold media moves, which include its mobile-focused $500+ million Otter Media joint venture with The Chernin Group. This is that significant move -- although AOL's success in the generally shorter-form mobile-driven video space is unproven (whereas AT&T's Otter Media J.V. owns leading mobile and millennial-focused multi-channel network (MCN) Fullscreen which already has a massive audience with billions of monthly views); and

(5) Verizon can now also use its heft via its FiOS network to supercharge its in-home OTT media ambitions with existing and increasingly well-funded video content from AOL. Netflix "Killer"? Maybe not so drastic, but certainly FiOS just got a lot more interesting.

Fascinating development. Bold. That's precisely the kind of strategic mega-moves that these times deserve. At first blush, my "blink" reaction is that I like it.